LLP, is the world recognized business entity was introduced in India by way of Limited Liability Partnership Act, 2008. It is a form of business entity in which all the partners have limited liabilities. Therefore in LLP one member is not responsible or liable for another’s member misconduct or negligence. Plenty of businesses started in India as Limited Liability Partnership, may now wish to convert into private limited company for more growth in business. As per the provision of the Section 366 of the companies Act 2013, an LLP can convert into private limited effortlessly. However, there are various requirements are required to convert LLP into Private Limited. In this article, I am going to tell you step by step how you can convert LLP into Private limited easily.
Approval of Name: Before making an application for Incorporation of the Private Limited Company. Name approval has to be obtained from Registrar of Companies RUN form. The intention of the conversion of LLP into Private Limited company shall be expressed in this form by providing required information. The name once approved, will be valid 60 days from the receipt of approval from the Ministry.
Securing DSC and DIN number: In case of 7 members, who are the future directors after the conversion, do not have the DSC or DIN, for all future directors must be obtained. For obtaining a DIN, an application must be filled on MCA portal. DIN application is processed and approved by central government via the official of regional director, the ministry of corporate affairs. The form must be filled by self-attested address proof and identity proof with 1 recent passport size colored photo of the applicant. All the required document should be attested by a practicing cost accountant or a practicing chartered accountant. For that you can also get in touch with Unilex Business Consultant, here professionals will help you regarding opting DIN and DSC.
Preparation and filing of Form NO, URC- 1: After obtaining name approval and DIN and DSC, applicant shall prepare and fill Form No. URC-1, along with all following documents.
1. A list showing the name, address, occupations for all persons named therein as members of details of shares held by them respectively, showing separately shares, allotted for consideration in case, and for consideration other than cash along with the source of consideration and distinguishing, in cases where shares are numbered, each share by its number. Who on a day, not being more than six clear days before the day of filling the application, were partners of limited liability partnership.
2. A list showing the particulars of persons proposed as the first directors of the company, their names, including surnames or family names, the DIN, passport number, residential address, and their interest in other firms with their consent to act as Director of the Company.
3. No objection of the certificate from the concerned Registrar LLP.
4. Declaration of the two or more directors verifying the particulars of all members.
5. Copy of newspaper advertisement.
6. Statement of accounts of the company, prepare not later than 6 days preceding the date of application of the duly certificate by author, if applicable.
7. Written consent from the majority of the members whether present in person or by proxy at a general meeting agreeing for registration under section 366 of the companies Act 2013.
Memorandum articles of association. After obtaining name approval, and approval of Form URC-1. From the Registrar, the draft constitutional Documents of Proposed Company i.e, Memorandum of Association and Article of Association is to be drafted and filled with the ROC along with the forms. The conversion process provides certain tax benefits, however for availing the same several additional requirements needs to met, for instance, maintaining the same shareholding by the partners as was in the previous LLP when conversion takes place, for five years of conversion the former partners of such LLP who are now shareholders in the newly formed company cannot in total have shareholding less than 50 percent. The last page of the Memorandum and Articles and the number of the shares to be subscribed by each. This last page required to be executed by subscribers.
While drafting MOA, the object of the company must include the object of the conversion of the LLP into Private Limited Company.Filling of Incorporation Form
Clarification/ Additional information Required by ROC:After all incorporation papers are filled and reviewed by the ROC, the ROC may require certain clarifications. These clarification or enquiry need to be satisfied by the person who has been authorized to do so by the Power of the Attorney filed with ROC.
Certification of Incorporation:Once all the clarification are provided, the certificate of incorporation is issued by the ROC and the company is deemed to be incorporated from the date of the certificate of incorporation.After obtaining the registration under section 377 of the Companies Act, 2013, intimation to this effect shall be given, within fifteen days of such registration to the concerned Registrar under which it was originally registered, along with necessary documents of the paper for its dissolution as Limited Liability Partnership.Reasons for Conversion of LLP into Private Limited:
There is no concept of the shareholders in LLP. But, in the private limited you will get this concept. That why it is private limited is a viable choice for the business owners to wants to expand their business to the next level.
With growing interest among the investors you can expand your business on the international platforms as well.
The concept of the conversion of LLP into Private Limited has been accepted in countries like US, UK, Australia, and Germany. It is a form of business entity, which allows partners to be restricted from Joint liability of partners in a partnership firm. At present, this LLP bill is in the form of mini companies Act. The liability of the personal business assets of the partners. This is the great belief to the partners, particularly professionals like chartered accountants, legal advisors and other professionals who are round the clock available for the clients to support them regarding conversion of LLP into Private limited. So, if you want to convert your existing LLP firm into Private Limited, feel free to contact to Unilex Business Consultant. Here, the professionals are always ready to help you regarding any business entity and offer you the satisfactory outcomes. To get in touch with us, all you need dial our number or come to our office and share all your details with our professionals. As soon as we receive your requirements, we will work on it and offer you great satisfactory solutions.